PARAMOUNT PICTURES INTERNATIONAL LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-3(3)(1), MUMBAI

The relevant particulars of the two assessment years are summarised below:

At the outset, it is pertinent to record that the amount of income declared for assessment year 2019-20 is stated in the assessment order at Rs.4,44,34,920/-, whereas Ground No. 1 refers to income of Rs.5,13,52,795/- as having been offered in the return. Further, the draft assessment order for assessment year 2020-21 proposed the total income at Rs.77,62,63,565/-, whereas the final assessed income is Rs.77,62,75,565/-, which includes business income of Rs.12,000/- disputed by the assessee in Ground No. 6.

The assessee is a company incorporated in the United Kingdom and is stated to be a tax resident of the United Kingdom. It is engaged in the business of licensing television content and films. During the years under consideration, the assessee earned licensing revenues from various resident as well as non-resident customers in consideration for granting rights in films, programmes and other content for exploitation through television, satellite, internet and other non-theatrical media.

The assessee had entered into a manpower supply services agreement dated 29.12.2016, effective from 01.04.2016, with its Indian associated enterprise, Viacom18 Media Private Limited. Pursuant to the agreement, Viacom18 Media Private Limited provided one of its employees or personnel to assist the assessee in relation to its television content licensing and distribution 4

On the basis of the aforesaid arrangement, the assessee claimed that it had a permanent establishment in India. It further claimed that, on the basis of its transfer pricing analysis, 4 per cent of the revenues derived from contracts in which the employee supplied by Viacom18 Media Private Limited was involved was attributable to the permanent establishment in India. According to the assessee, the receipts effectively connected with the permanent establishment were required to be considered as business profits under Article 7 read with Article 13(6) of the India-UK DTAA and only the profits attributable to the permanent establishment could be brought to tax in India.

For assessment year 2019-20, the assessee filed its return of income on 26.11.2019 declaring total income of Rs.4,44,34,920/- , as recorded in the assessment order. It claimed credit of tax deducted at source amounting to Rs.4,33,06,719/-, and the tax payable was computed at Rs.1,83,46,635/-. The return was processed under section 143(1) on 19.05.2020. The case was selected for complete scrutiny under CASS, inter alia, on the grounds that the assessee had claimed a substantial refund, had claimed a substantial refund out of tax deducted at source under

During the year, the assessee received licensing revenues from nine customers in respect of contracts which, according to it, were connected with its permanent establishment in India. The customer-wise receipts, as recorded in the assessment order, were as follows:

The assessee attributed 4 per cent of the aforesaid receipts to its permanent establishment in India. It also stated that it had separately earned income from licensing home videos to Excel Productions Audiovisuals Private Limited. Since the employee provided by Viacom18 Media Private Limited was stated not to have been involved in the activities relating to that contract, the assessee treated the receipts of Rs.15,96,251/- from the said customer as royalty and offered the same to tax in India on a gross basis.

The Assessing Officer did not accept the assessee’s treatment of the receipts of Rs.1,28,38,19,887/- as business receipts attributable to the alleged permanent establishment. The Assessing Officer examined the terms of the digital content licence agreements, including the agreement entered into with Reliance Jio Digital Services Private Limited, and observed that the assessee had granted licences under copyright for the distribution and exhibition of the licensed content. He held that the receipts were

The Assessing Officer further held that the condition concerning effective connection with a permanent establishment was not satisfied merely because an employee supplied by Viacom18 Media Private Limited performed certain liaison and support functions in India. According to him, the assessee had failed to establish a connection between the permanent establishment and the right, property or contract in respect of which the royalty was received. He also observed that some of the customer agreements had been entered into before the manpower supply arrangement with Viacom18 Media Private Limited. The Assessing Officer accordingly concluded that Article 13(6) could not be invoked to treat the receipts as business profits under Article 7.

As regards the receipts from non-resident customers, the assessee contended that, by virtue of Article 13(7) of the India-UK DTAA, royalty could be said to arise in India only where the payer was a resident of India or where a non-resident payer had a permanent establishment in India in connection with which the liability to pay the royalty was incurred and the royalty was borne by such permanent establishment. The Assessing Officer rejected this contention. He was of the view that Article 13(2) conferred taxing rights upon the Contracting State in which the royalty arose and that Article 13(7) could not be construed so as to override those taxing rights. He further observed that the assessee had not furnished sufficient evidence to establish that the non-resident

The Assessing Officer consequently treated the receipts of Rs.1,28,38,19,887/- from the nine customers as royalty taxable in India. After including the royalty income of Rs.15,96,251/- already offered by the assessee, the total royalty income was computed at Rs.1,28,54,16,238/-. A draft assessment order under section 144C(1) was passed on 29.09.2021.

The assessee filed objections before the DRP against the proposed variation. The objections broadly related to the determination of total income, the taxability of receipts from non- resident customers in view of Article 13(7), the alleged absence of adequate opportunity to furnish evidence concerning the permanent establishments of non-resident customers, and the initiation of penalty proceedings under section 270A.

The DRP, by its directions dated 24.06.2022, rejected the objections. The DRP held that the assessee had not made out a case for application of Article 13(6), whereas the Assessing Officer had established the applicability of Article 13(2) read with section 9(1)(vi) of the Act. It observed that the assessee had treated the receipts from Excel Productions Audiovisuals Private Limited as royalty while taking a different position in respect of receipts of a similar nature from other customers. The DRP also held that Article 13(7) could not be interpreted as overriding the taxing rights conferred by Article 13(2). As regards the observations relating to the absence of permanent establishments of the non-

Pursuant to the directions of the DRP, the Assessing Officer passed the final assessment order dated 19.07.2022 under section 143(3) read with section 144C(13), assessing the total income at Rs.1,28,54,16,238/-. Penalty proceedings under section 270A were initiated separately, and interest under sections 234A, 234B, 234C and 234D was directed to be charged, as applicable.

During this year, the assessee continued to assert that it had a permanent establishment in India by reason of the services rendered by the employee supplied by Viacom18 Media Private Limited and that 4 per cent of the revenues derived from the relevant contracts was attributable to such permanent establishment. It was, however, stated that, having regard to the position taken by the Assessing Officer in the assessment proceedings for assessment year 2017-18, the assessee had offered the royalty receipts relating to television licensing and distribution from resident payers to tax in India on a gross basis under section 115A. The assessee stated that such treatment was adopted to buy peace and avoid litigation, without conceding its contention regarding the existence of a permanent establishment in India.

During the year under consideration, the assessee earned licensing revenue aggregating to Rs.45,01,67,071/- from the

The assessee contended that these receipts did not arise in India and were not taxable in India, having regard to Article 13(7) read with Article 13(2) of the India-UK DTAA. According to the assessee, where a transaction was between two non-residents, the royalty income was deemed to arise in the State of residence of the payer unless the payer had a permanent establishment in India in connection with which the liability to make the payment was incurred and the royalty expenditure was borne by such permanent establishment.

The Assessing Officer rejected the contention. He held that the payments had been made for licences granted for the distribution and exhibition of content in India and were covered by the definition of royalty under section 9(1)(vi) and Article 13(3) of the India-UK DTAA. Referring to the agreement with Netflix Global

The Assessing Officer also recorded that the assessee had failed to furnish evidence to establish that the non-resident payers did not have permanent establishments in India or that the obligation to pay the royalty was not incurred or borne by any such permanent establishment. He accordingly proposed to treat the receipts of Rs.45,01,67,071/- as royalty taxable in India at the applicable rate. A draft assessment order under section 144C(1) was passed on 27.09.2022 proposing the total income at Rs.77,62,63,565/-.

The assessee filed objections before the DRP. The DRP, by its directions dated 27.06.2023, sustained the treatment of the disputed receipts as royalty. In conformity with those directions, the Assessing Officer passed the final assessment order dated 17.07.2023 under section 143(3) read with section 144C(13). The final order included royalty income of Rs.32,60,96,494/- already offered by the assessee, additional royalty income of Rs.45,01,67,071/- and business income of Rs.12,000/-, resulting in total assessed income of Rs.77,62,75,565/-. Penalty proceedings under section 270A were initiated separately, and interest under sections 234A, 234B, 234C and 234D was directed to be charged, as applicable.

The learned AR explained that, for assessment year 2019-20, the assessee filed its return on the basis that it had a permanent establishment in India within the meaning of Article 5 of the India- UK DTAA on account of the activities undertaken by an employee of Viacom18 Media Private Limited in connection with the assessee’s business in India. On that basis, the assessee attributed 4 per cent of the revenue derived from the relevant contracts to the alleged permanent establishment and offered the same to tax as business income. The percentage of attribution was

For assessment year 2020-21, since the Assessing Officer had not accepted the assessee’s position regarding the existence of a permanent establishment in the earlier assessment proceedings, the assessee, solely to avoid litigation and buy peace, offered the receipts from resident customers as royalty income on a gross basis in its revised return. This treatment was adopted without prejudice to its stand concerning the permanent establishment.

The learned AR submitted that the controversy surviving before the Tribunal was confined to the taxability of the licensing receipts received from non-resident customers incorporated and situated outside India. The assessee was not disputing, for the purposes of the present grounds, the characterisation of the receipts as royalty. Its principal contention was that even if the receipts were regarded as royalty, they neither accrued nor arose, nor were deemed to accrue or arise, in India under section 9(1)(vi)(c) of the Act or Article 13(7) of the India-UK DTAA.

Referring first to the provisions of the Act, the learned AR submitted that section 90(2) permits a non-resident assessee to be governed either by the provisions of the Act or by the applicable tax treaty, whichever are more beneficial. Section 9(1)(vi) provides three separate circumstances in which royalty income is deemed

The learned AR submitted that under section 9(1)(vi)(c), royalty payable by a non-resident is deemed to accrue or arise in India only where it is payable in respect of a right, property or information used, or services utilised, for the purposes of a business or profession carried on by such non-resident payer in India or for the purposes of making or earning income from a source in India. Thus, every royalty payment made by one non- resident to another non-resident does not automatically become taxable in India. The Revenue must first establish that the non- resident payer carried on a business or profession in India or had a source of income in India and that the royalty payment had the requisite connection with such business or source.

It was contended that the Assessing Officer had neither examined nor established the foundational facts necessary for invoking section 9(1)(vi)(c). There was no finding, supported by material, that the respective non-resident customers carried on any business in India or had any source of income in India in connection with which the royalty payments were made. According to the learned AR, the mere fact that the licensed content was capable of being distributed or exhibited in India was insufficient to satisfy the statutory conditions prescribed in section 9(1)(vi)(c).

The learned AR further submitted that the burden of establishing the facts necessary to bring the receipts within the charging or deeming provisions rested upon the Revenue. In

The learned AR also relied upon ADIT v. E-Funds IT Solution Inc. [2017] 399 ITR 34 (SC) and ITO v. Right Florists Pvt. Ltd. [2013] 25 ITR(T) 639 (Kolkata Tribunal), for the proposition that the initial burden of establishing the existence of a permanent establishment in India rests upon the Revenue. It was submitted that the Assessing Officer could not require the assessee to prove a negative fact and draw an adverse inference merely because the assessee had allegedly failed to establish that the non- resident customers did not have permanent establishments in India.

Turning to the India-UK DTAA, the learned AR submitted that Article 13(1) gives the State of residence, namely the United Kingdom in the present case, the primary right to tax royalty income. Article 13(2) permits the source State to tax royalty only where such royalty arises in that State, subject to the rate limitation specified therein. Therefore, the expression “arising in a

The learned AR submitted that Article 13(6) applies where the recipient of royalty carries on business in the source State through a permanent establishment situated therein and the right, property or contract giving rise to the royalty is effectively connected with such permanent establishment. In the present case, the Assessing Officer himself had rejected the assessee’s contention that it had a permanent establishment in India. Accordingly, on the Assessing Officer’s own case, Article 13(6) could not be invoked.

It was submitted that Article 13(7) specifically determines the place where royalty is deemed to arise for the purpose of conferring taxing rights upon the source State under Article 13(2). Under Article 13(7), royalty would be deemed to arise in India only where:

According to the learned AR, both the existence of a permanent establishment or fixed base of the non-resident payer in India and the connection of the royalty liability with such permanent establishment or fixed base were cumulative conditions.

In support of the interpretation of Article 13(7), the learned AR relied upon the decision of the Co-ordinate Bench in Set Satellite (Singapore) Pte. Ltd. v. ADIT (2010) 132 TTJ 459, particularly paragraphs 17 to 20, which was upheld by the Hon’ble jurisdictional High Court in DIT v. Set Satellite (Singapore) Pte. Ltd. [2014] 269 CTR 197 (Bombay), particularly paragraph 7. Reliance was also placed on the decision of the Co-ordinate Bench in Decca Survey Overseas Limited UK v. Income Tax Officer, ITA Nos. 8506 to 8508, 8895 and 8897/Bom/1990 and 8625/Bom/1991, particularly paragraph 4. It was submitted that these decisions support the proposition that, in the case of royalty paid by a non-resident, the Revenue must establish the existence of the payer’s permanent

The learned AR thereafter addressed the decision of the Co- ordinate Bench in ADIT v. Global Cricket Corporation (2022) 145 taxmann.com 570. It was fairly submitted that, in that decision, while interpreting Article 12 of the India-Singapore DTAA, the Bench held that the expression “arise” took its meaning from the domestic law of the Contracting State and that royalty deemed to accrue or arise in India under sections 5 and 9 would be treated as royalty arising in India for the purposes of Article 12(1) and Article 12(2), independently of Article 12(7).

The learned AR, however, sought to distinguish the aforesaid decision. It was submitted that if the place where royalty arises were to be determined entirely under sections 5 and 9 of the Act, the specific source rule contained in Article 13(7) would be rendered redundant and devoid of independent operation. Article 13(7) expressly uses the words “shall be deemed to arise in a Contracting State” and identifies the circumstances in which the necessary economic nexus with a Contracting State is established. Therefore, Articles 13(2) and 13(7) must be read harmoniously, and Article 13(2) could not be applied independently of the source rule contained in Article 13(7).

It was further submitted that Article 13(7) was structurally a source rule and not merely an expansionary provision. It prescribed the relevant forms of economic nexus, namely the payer being a resident of the Contracting State or the payer having a permanent establishment in that State in connection with which

The learned AR contended that the decision in Global Cricket Corporation did not consider the binding decision of the Hon’ble jurisdictional High Court in Set Satellite (Singapore) Pte. Ltd., which upheld the Tribunal’s application of Article 12(7) of the India-Singapore DTAA in determining whether royalty arose in India. It was, therefore, submitted that the decision in Global Cricket Corporation did not lay down the correct proposition applicable to the present appeals.

On the basis of the above submissions, the learned AR contended that the Assessing Officer had failed to establish the conditions required either under section 9(1)(vi)(c) of the Act or Article 13(7) of the India-UK DTAA. He accordingly prayed that the additions made in respect of the licensing revenues received from the non-resident customers be deleted in both assessment years.

Per contra, the learned Departmental Representative (DR) strongly relied upon the respective orders of the Assessing Officer and the directions of the DRP. It was submitted that the principal controversy was whether the royalty receipts were taxable under Article 13(2) of the India-UK DTAA, as held by the Assessing Officer, or were liable to be assessed as business profits under Article 7, as claimed by the assessee.

The learned DR submitted that the burden was upon the assessee to establish that the right, property or contract giving rise to the royalty was effectively connected with its alleged permanent establishment in India. Only upon discharging this burden could the assessee invoke Article 13(6) and seek assessment of the receipts as business profits under Article 7. Mere assertion regarding the existence of a permanent establishment or the performance of certain liaison and support activities by an employee supplied by Viacom18 Media Private Limited was not sufficient to establish the effective connection required by Article 13(6).

It was further submitted that, in the preceding assessment year 2017-18, the Assessing Officer had taxed the licensing receipts as royalty under Article 13(2), and the assessee had accepted that treatment. The learned DR also pointed out that, during assessment year 2019-20, the assessee itself offered the royalty received from Excel Productions Audiovisuals Private Limited to tax under Article 13(2) on the ground that the right in

The learned DR contended that the assessee had adopted an inconsistent position in respect of the licensing receipts received from the other nine customers. According to her, the assessee had not established that the rights, property or contracts giving rise to those receipts were effectively connected with its alleged permanent establishment in India. Since the condition stipulated in Article 13(6) was not satisfied, Article 7 could not be invoked. The Assessing Officer was, therefore, justified in taxing the receipts under Article 13(2) on a gross basis.

With regard to the royalty received from non-resident customers, the learned DR submitted that the issue was squarely covered in favour of the Revenue by the decision of the Co-ordinate Bench in ADIT v. Global Cricket Corporation (supra) and connected appeals. It was submitted that the said decision was rendered in the context of Article 12 of the India-Singapore DTAA, the provisions of which were similar to Article 13 of the India-UK DTAA applicable in the present appeals.

Elaborating upon the aforesaid decision, the learned DR submitted that the expression “arise” in Article 13(2) had been employed in the context of determining the right of a Contracting State to tax royalty income and not for defining the scope of income independently of the domestic law. Consequently, the place where royalty accrued or arose had to be determined with reference to the provisions of sections 5 and 9 of the Act.

The learned DR accordingly contended that the assessee’s reliance on Article 13(7) was misplaced and that the disputed licensing receipts were taxable in India under Article 13(2). She, therefore, prayed that the treatment adopted by the Assessing Officer and sustained by the DRP be upheld and the grounds raised by the assessee be dismissed.

We have considered the rival submissions and the material presently available on record. Before examining the judicial precedents relied upon by the parties or recording any conclusion, it is necessary to identify the precise controversy and distinguish the separate statutory and treaty provisions invoked by them.

The rival submissions proceed on two materially different formulations of the controversy. According to the learned AR, the surviving dispute is confined to the taxability of licensing receipts from non-resident customers. The assessee does not, for the purpose of these grounds, dispute their characterisation as royalty. Its case is that such royalty neither accrues nor arises, nor is deemed to accrue or arise, in India under section 9(1)(vi)(c) and

The first task, therefore, is to ascertain the actual scope of the grounds before us. The grounds relating to royalty in both assessment years specifically challenge the taxation of receipts from non-resident customers under Article 13(2), on the ground that such receipts are not taxable in India having regard to Article 13(7). The grounds do not seek adjudication of the taxability of receipts from resident customers. Nor do they expressly seek assessment of the disputed receipts as business profits under Article 7.

It is true that, for assessment year 2019-20, the assessee originally claimed the existence of a permanent establishment in India and attributed 4 per cent of the revenues from the relevant contracts to such permanent establishment as business income. That return position explains the course of the assessment proceedings. However, the nature of the return position and the controversy surviving in appeal are not necessarily coextensive. The live grounds before us require examination of the chargeability of royalty received from non-resident payers.

The receipts considered by the Assessing Officer for assessment year 2019-20 included receipts from both resident and non-resident customers. Based on the customer-wise particulars appearing in the assessment order, the composition is as follows:

Thus, for the substantive royalty ground, the amounts requiring examination appear to be Rs.88,09,89,747/- for assessment year 2019-20 and Rs.45,01,67,071/- for assessment year 2020-21. This segregation is necessary because the arguments concerning section 9(1)(vi)(c) and the second limb of Article 13(7) specifically concern royalty payable by non-residents. The exact extent to which the resident-customer receipts remain in dispute must be determined from the grounds and the relief

Section 90(2) provides that where a DTAA applies, the provisions of the Act apply to the extent they are more beneficial to the assessee. The appropriate sequence is, therefore, first to examine whether the receipts are chargeable under the Act and, if they are, whether the applicable DTAA restricts or excludes that charge. The treaty may restrict the operation of the Act, but the primary charge must first be identifiable under the Act.

In the case of royalty payable by a non-resident, section 9(1)(vi)(c) provides that the income is deemed to accrue or arise in India where the royalty is payable in respect of any right, property or information used, or services utilised: i. for the purposes of a business or profession carried on by the non-resident payer in India; or ii. for the purposes of making or earning income from any source in India.

The existence of a permanent establishment of the payer is not an express condition in section 9(1)(vi)(c). The statutory enquiry is whether the relevant right, property or information was used for the payer’s business or profession carried on in India or for making or earning income from a source in India. Therefore, to the extent the assessee’s submissions suggest that the absence of a permanent establishment of the payer is by itself sufficient to exclude section 9(1)(vi)(c), the statutory contention requires refinement. 28

It is also necessary to distinguish between the characterisation of a payment and the situs of the resulting income. The grant of a licence in respect of copyright may bring the consideration within the definition of “royalty” under Explanation 2 to section 9(1)(vi). That characterisation does not, by itself, determine whether the royalty is deemed to accrue or arise in India. Where the payer is a non-resident, that enquiry is governed by clause (c), which requires the prescribed connection between the licensed right and either a business carried on by the payer in India or a source of income of the payer in India. The Explanation to section 9(2), which dispenses with the requirement of the presence, place of business or business connection of the 29

The learned AR contends that these foundational facts were neither examined nor established. The Revenue’s answer is that the exploitation of licensed content within the Indian territory itself supplies the necessary Indian source. The evidentiary record must therefore be examined customer-wise. A general conclusion applicable collectively to all non-resident customers may not be sufficient if the contractual territories, modes of exploitation and business arrangements differ.

The rival submissions also require a clear distinction between Article 13(6) and Article 13(7). The two provisions concern different permanent establishments and perform different functions.

Article 13(6) requires the beneficial owner to carry on business in the other Contracting State through a permanent establishment situated therein and further requires the right, property or contract in respect of which the royalty is paid to be effectively connected with that permanent establishment. It is, therefore, concerned with the assessee’s alleged permanent establishment in India.

Article 13(7), in contrast, contains a rule concerning the situs of the royalty. Its first limb refers to the residence of the payer. Its second limb applies where the payer, whether a resident of a Contracting State or not, has a permanent establishment or fixed base in a Contracting State in connection with which the obligation to make the payment was incurred and the payment is borne by that permanent establishment or fixed base.

The learned DR’s submissions concerning the failure of the assessee to establish effective connection with its own permanent establishment are relevant to Article 13(6) and the assessee’s original claim for assessment under Article 7. They do not directly answer the separate question raised by the assessee under Article 13(7), namely whether royalty paid by non-resident customers can be regarded as arising in India.

Conversely, the existence or absence of the non-resident payer’s permanent establishment in India is relevant to the second limb of Article 13(7), but not to the effective-connection test under

Since the Assessing Officer rejected the assessee’s claim that it had a permanent establishment in India, Article 13(6) would not operate on the Assessing Officer’s own factual premise. In that situation, the receipts would ordinarily remain within the framework of Article 13(1), Article 13(2) and Article 13(7). The principal treaty issue would then be the meaning and operation of the words “arising in a Contracting State” in Article 13(2), read with the deeming rule in Article 13(7).

The assessee’s interpretation is that Article 13(7) exhaustively determines the Contracting State in which royalty is deemed to arise. On this construction, royalty paid by a non- resident customer can arise in India only if the payer has a permanent establishment or fixed base in India, the obligation to pay royalty was incurred in connection with it, and the royalty was borne by it.

The Revenue’s interpretation is that the word “arising” in Article 13(2) takes its content from sections 5 and 9 of the Act. On this construction, once royalty is found to accrue or arise, or is deemed to accrue or arise, in India under domestic law, India acquires the right to tax it under Article 13(2), notwithstanding that the payer is a non-resident and the conditions in the second limb of Article 13(7) are not satisfied.

These competing interpretations give rise to the central legal question: whether Article 13(7) is an exhaustive treaty source rule 33

The assessee’s harmonious-construction argument has textual force because Article 13(7) specifically states when royalties “shall be deemed to arise” in a Contracting State. The Revenue’s construction, however, rests upon the proposition that Article 13(2) recognises the domestic law concept of accrual or deemed accrual and that Article 13(7) does not restrict that concept. The correct construction cannot be settled merely by characterising Article 13(7) as either exhaustive or supplementary. It requires examination of the language, context and scheme of Article 13 and the judicial authorities relied upon by both sides.

The parties have also advanced differing submissions regarding the burden of proof. The assessee contends that the Revenue must establish the jurisdictional facts necessary to bring the receipts within section 9(1)(vi)(c) and Article 13. The Revenue and the authorities below proceeded substantially on the basis that the assessee had failed to prove that the non-resident customers did not have permanent establishments in India.

The burden must be considered separately for the statutory and treaty enquiries. For section 9(1)(vi)(c), the Revenue must identify the Indian business or Indian source of the non-resident payer and establish the necessary connection of the royalty with that business or source. For Article 13(7), if the Revenue seeks to rely upon the payer’s permanent establishment in India, the

At the same time, relevant information concerning the identity, residence, contractual arrangements and business operations of the customers may be within the assessee’s knowledge or possession. The assessee cannot succeed only by asserting that the customers are non-residents. The tax residency evidence, agreements, territorial rights, no-permanent- establishment declarations and available information concerning the manner in which the content was exploited must be examined. Once the Revenue places prima facie material showing an Indian business or income source, the evidentiary burden may require an answer from the assessee.

For the purpose of adjudicating the substantive issue, we proceed on the basis that the assessee has placed on record no- permanent-establishment declarations from all the concerned non-resident customers for the respective assessment years. Accordingly, the legal issue may be examined on the premise that the non-resident payers did not have permanent establishments or fixed bases in India. If, upon verification of the factual paper book, any declaration is found to be unavailable in respect of a particular customer or assessment year, the matter concerning only that customer may be restored to the Assessing Officer for the limited purpose of verifying the existence, authenticity and relevant assessment year of such declaration. Such verification shall not permit a fresh or wider examination of issues already

We now examine the judicial precedents relied upon by the parties. At this stage, the object is to identify the ratio of each decision, the factual setting in which it was rendered and its applicability to the controversy before us, without recording the ultimate conclusion in these appeals.

In Parimisetti Seetharamamma v. CIT [1965] 57 ITR 532 (SC), the assessee had received money and jewellery from Princess Sita Devi and claimed that the receipts represented gifts made out of love and affection. The Revenue sought to treat the receipts as remuneration for services. The issue before the Hon’ble Supreme Court concerned the burden of establishing that the receipts fell within the taxing provisions. The relevant finding of the Hon’ble Supreme Court reads as under:

In the present appeals, the character of the receipts as royalty is not being disputed for the purpose of the substantive grounds. 36

The decision, however, does not answer what constitutes a business carried on in India or a source of income in India. Nor does it interpret Article 13(7) of the India-UK DTAA. Its applicability is confined to allocation of the initial burden under the charging provision.

In Qualcomm Incorporated v. ADIT [2013] 23 ITR(T) 239 (Delhi Tribunal), the assessee, a company incorporated in the United States, owned patents relating to CDMA technology. It licensed those patents to foreign original equipment manufacturers situated outside India. The foreign manufacturers used the technology for manufacturing handsets and network equipment outside India. Some of those products were subsequently sold to Indian telecom operators. The Revenue sought to tax the royalty received by Qualcomm from the foreign manufacturers under section 9(1)(vi)(c).

The Co-ordinate Bench first examined the burden under section 9(1)(vi)(c). Paragraphs 129 and 130 contain the following findings:

The material factual finding in paragraph 176 was:

In ADIT v. E-Funds IT Solution Inc. [2017] 399 ITR 34 (SC), the Revenue sought to establish that the United States entities had fixed-place, service and agency permanent establishments in India through their Indian subsidiary. The Hon’ble Supreme Court considered Article 5 read with Article 7 of the India-USA DTAA. The relevant finding in paragraph 10 is:

Its relevance to the present appeals is limited. It does not concern royalty payable by one non-resident to another, section 9(1)(vi)(c), Article 13(7), or the question whether a treaty royalty- source rule is exhaustive. It supports the assessee only on the general proposition that, if the Revenue relies upon the existence of a permanent establishment of a foreign customer in India, the foundational burden rests upon the Revenue.

Since we are presently proceeding on the factual assumption that the no-permanent-establishment declarations of all the concerned non-resident customers are available on record, the practical significance of E-Funds is further reduced. It does not determine whether royalty may still be deemed to accrue or arise 40

In ITO v. Right Florists Pvt. Ltd. [2013] 25 ITR(T) 639 (Kolkata Tribunal), the assessee made payments to Google Ireland and Yahoo USA for online advertisement services. The Revenue sought to make a disallowance under section 40(a)(i) for failure to deduct tax under section 195. The Co-ordinate Bench examined whether the advertising receipts were taxable in India as business income or fees for technical services and whether Google or Yahoo had permanent establishments in India. In paragraph 28, the Co-ordinate Bench observed:

The decision is of limited assistance in the present case. It concerned online advertising services and their characterisation as business profits or fees for technical services. It did not concern royalty or interpret a provision corresponding to Article 13(7). Its observation concerning the Revenue’s burden to establish a permanent establishment supports the general proposition advanced by the assessee, but does not decide whether royalty

Therefore, Right Florists may be relevant on the burden concerning the existence of a permanent establishment, but it is not a direct authority on either the statutory royalty-source rule or the relationship between Articles 13(2) and 13(7).

The decision in DIT v. Set Satellite (Singapore) Pte. Ltd. [2014] 45 taxmann.com 100, 269 CTR 197 (Bombay) has close factual relevance. Set Satellite, a Singapore resident, acquired cricket telecast rights from Global Cricket Corporation, also a Singapore resident. The licence territory included India. Set Satellite had an alleged permanent establishment in India through which marketing activities were carried on. The authorities below found that the payment obligation was incurred for broadcasting operations conducted from Singapore and had no connection with the marketing activities of its permanent establishment in India. The Hon’ble Bombay High Court recorded the following findings in paragraph 7:

The decision is jurisdictional and factually significant because it concerns:

On the assumed facts of the present appeals, the non- resident payers did not have permanent establishments in India. To that extent, the factual requirement recognised in Set Satellite concerning the payer’s permanent establishment and the economic connection of the royalty liability with it would not be satisfied.

However, the precedential scope of the judgment must be stated carefully. The Hon’ble High Court did not pronounce a general proposition that Article 12(7) exhaustively determines every circumstance in which royalty may arise in India. On the contrary, it expressly characterised the Tribunal’s conclusions as factual and peculiar to that case and stated that no general rule had been laid down.

ADIT v. Global Cricket Corporation Pte. Ltd. [2022] 145 taxmann.com 570 (Mumbai Tribunal) is the most direct authority relied upon by the Revenue. It is important that the royalty stream examined in that case was the same stream that had earlier been considered from the payer’s side in Set Satellite. Set Satellite was the payer and Global Cricket Corporation was the recipient of the licence fee for cricket broadcasting rights. The Co- ordinate Bench specifically considered whether Article 12(7) of the India-Singapore DTAA exhaustively determined where royalty arose or whether income deemed to accrue or arise in India under sections 5 and 9 could independently be treated as royalty arising in India for Article 12(2). The Co-ordinate Bench rejected the argument that Article 12(7) was exhaustive. Paragraph 5.16 states:

The legal conclusion in paragraph 5.18 reads:

This decision has substantial applicability to the present appeals for the following reasons:

The mere absence of a permanent establishment of the payer would not answer the domestic-law issue if Global Cricket Corporation is followed, because that decision holds that Article 12(7) is not exhaustive and permits the source State to invoke Article 12(2) where royalty is deemed to accrue or arise under section 9(1)(vi)(c).

The assessee’s contention that Global Cricket Corporation failed to follow the jurisdictional High Court in Set Satellite must be assessed with caution. A coordinate Bench could not have taken a view contrary to a binding pronouncement of the jurisdictional High Court. However, the Co-ordinate Bench in Global Cricket Corporation did not purport to overrule the High Court. It distinguished Set Satellite on the ground that the broader and

Thus, on the material presently examined, it may not be accurate to state that Global Cricket Corporation was rendered in disregard of an express ratio of the Hon’ble Bombay High Court. Whether its distinction is ultimately acceptable must be considered while harmonising the jurisdictional decision with the later, more direct consideration of Articles 12(2) and 12(7).

The learned AR also relied upon Decca Survey Overseas Limited UK v. ITO, ITA Nos. 8506 to 8508, 8895 and 8897/Bom/1990 and 8625/Bom/1991. In this case the Co- ordinate Bench was concerned, inter alia, with fees for technical services received by the assessee, a United Kingdom company, from two foreign companies, namely ETPM and McDermott. The case of the assessee therein was that the payments received from those non-resident entities could not be regarded as having arisen in India because the payer-companies did not have permanent establishments in India. It was further contended that, even if the payer-companies were assumed to have permanent establishments in India, the Revenue had not established that the payments were borne by such permanent establishments.

The controversy was examined with reference to Article XIII(6) of the then applicable India-UK DTAA dated 16 April 1981. The material part of that provision was substantially similar to Article 13(7) of the presently applicable India-UK DTAA. It provided that

After reproducing the treaty provision, the Co-ordinate Bench interpreted the source rule in the following terms:

Applying the above interpretation to the facts before it, the Co-ordinate Bench recorded that there was nothing on record to show that ETPM and McDermott had permanent establishments in India or that the payments made by them were borne by any such permanent establishments. The material findings were recorded as under:

The decision is factually relevant to the present appeals in several respects. First, both cases concern payments made by non- resident customers to a United Kingdom resident. Secondly, the source rule examined in Decca Survey Overseas Limited is, in material respects, similarly worded to Article 13(7) of the presently applicable India-UK DTAA. Thirdly, although Decca Survey Overseas Limited concerned fees for technical services, the provision itself applies alike to “royalties and fees for technical services”. The reasoning concerning the residence of the payer, the existence of its permanent establishment and the payment being borne by such establishment is, therefore, equally relevant to royalty income.

On the assumption presently directed to be adopted, namely that the declarations of the concerned non-resident customers regarding absence of their permanent establishments in India are available on record, the facts of the present appeals substantially correspond to the material facts considered in Decca Survey Overseas Limited. If the non-resident payers did not have permanent establishments or fixed bases in India, the second limb

Decca Survey Overseas Limited, therefore, furnishes direct support to the assessee’s contention that the existence of an Indian territory within the licensed territory, or the possible exploitation of the licensed content in India, would not by itself satisfy the treaty source rule where the payer was a non-resident and the conditions relating to the payer’s permanent establishment were not established.

The decision in Decca Survey Overseas Limited must, however, be evaluated together with the subsequent decision in case of ADIT v. Global Cricket Corporation Pte. Ltd. The latter decision expressly noticed the reliance placed on Decca Survey Overseas Limited. In paragraph 5.6 of Global Cricket Corporation, the assessee had argued, on the strength of Decca Survey Overseas Limited, that Article 12(7) of the India- Singapore DTAA exhaustively defined the place where royalty arose.

The Co-ordinate Bench in Global Cricket Corporation did not accept that contention. It held in paragraph 5.16 that Article 12(7) did not exhaustively define where royalty arose. It reasoned that royalty income could have an economic nexus with a State in different forms, including the nature and location of the right or property, the place of utilisation and the location of the payer.

It would not be correct to regard Global Cricket Corporation as having overlooked Decca Survey Overseas Limited. The earlier decision was specifically relied upon before and noticed by the later Bench. The later Bench distinguished it on the ground that the independent operation of Article 12(2), read with the domestic-law

At the same time, the decision in Decca Survey Overseas Limited shows that its reasoning is not confined merely to an absence of evidence concerning the payer’s permanent establishment. The Co-ordinate Bench expressly construed the treaty provision as laying down the “scheme of accrual” and held that a non-resident-to-non-resident payment was not eligible to tax in India unless the payer had an Indian permanent establishment and the payment was borne by such establishment. It is, therefore, a substantive authority supporting the assessee’s construction of Article 13(7), though its treatment in Global Cricket Corporation must necessarily be addressed.

The present case is closer to Decca Survey Overseas Limited in terms of the treaty involved because both concern the India-UK DTAA. However, the Revenue’s case in the present appeals, like the case advanced in Global Cricket Corporation, is not confined to the second limb of Article 13(7). The Assessing Officer has also sought to invoke section 9(1)(vi) and Article 13(2) on the ground that the licensed content was intended for exploitation in the Indian territory. Consequently, the distinction drawn in paragraph 5.17 of Global Cricket Corporation cannot be ignored.

The correct application of Decca Survey Overseas Limited will, therefore, ultimately depend upon the determination of the anterior legal question whether Article 13(7) constitutes the governing and exhaustive treaty source rule for royalty, as

The controversy can, however, be resolved on the facts of the present appeals without expressing any wider conclusion as to whether Article 13(7) is exhaustive in every conceivable situation. If the interpretation adopted in Decca Survey Overseas Limited is applied, the disputed receipts would not arise in India because the payers were non-residents, they did not have permanent establishments or fixed bases in India and the payments were neither incurred in connection with nor borne by any such establishments. Even if the interpretation adopted in Global Cricket Corporation is applied, the Revenue must first establish that the royalty accrued or arose, or was deemed to accrue or arise, in India under sections 5 and 9 of the Act. It is, therefore, necessary to examine whether the conditions prescribed in section 9(1)(vi)(c) were established in the present cases.

Section 9(1)(vi)(c) applies where royalty is payable by a non- resident in respect of any right, property or information used, or services utilised, for the purposes of a business or profession carried on by such non-resident in India or for the purposes of making or earning income from any source in India. These are two alternative statutory connections. The first concerns the business

The existence of a permanent establishment of the payer in India is not an express requirement of section 9(1)(vi)(c). Therefore, the absence of a permanent establishment would not, by itself, conclude the domestic-law enquiry. Nevertheless, the provision does not deem every royalty paid by one non-resident to another non-resident to accrue or arise in India merely because India is included in the geographical scope of the licence. The Revenue must establish the connection of the right, property or information with a business carried on by the payer in India or with an identifiable source of income of that payer in India.

Considering the nature of the assessee’s content-licensing business, the applicability of section 9(1)(vi)(c) was required to be examined separately with reference to each non-resident customer and the terms of the corresponding licensing agreement. The enquiry could not be confined to whether India formed part of the licensed territory. It was necessary to ascertain the precise nature of the rights granted, including whether the licence covered television broadcasting, digital streaming, theatrical exhibition, sub-licensing, distribution or any other mode of exploitation. It was further necessary to determine whether those rights were used, directly or indirectly, for the purposes of a business carried on by the particular non-resident payer in India or for making or earning income by that payer from an identifiable source in India.

In the case of customers engaged in a subscription-based streaming business, the Assessing Officer could have examined the number of subscribers situated in India, the subscription revenue attributable to those subscribers, the entity with which the Indian subscribers contracted, the entity which invoiced and collected the subscription charges and the entity in whose accounts such revenue was recorded. It was also relevant to determine whether the licensed content was used, directly or indirectly, for obtaining or retaining Indian subscriptions and whether the resulting subscription income accrued to the particular non-resident payer.

In the case of television broadcasters or advertisement- supported platforms, the Assessing Officer could have examined whether advertisements were inserted in or around the licensed

Where the payer was engaged in television broadcasting or content distribution, the Assessing Officer could have examined its agreements with Indian cable operators, direct-to-home operators, broadcasters, digital platforms or other distributors. Such examination could have disclosed whether the payer received carriage, placement, channel-subscription or distribution revenue from India and whether the content licensed by the assessee was used for earning that revenue.

Similarly, if the non-resident customer had sub-licensed the content to an Indian entity, it was necessary to examine the sub- licensing agreement, the consideration received from the Indian entity, the rights retained by the foreign payer and the connection between the payment made to the assessee and the income earned from the Indian sub-licensee.

In the case of multinational groups, it was particularly necessary to identify the legal entity which earned the alleged income from India. The business or source of income of an Indian subsidiary, another foreign group company or an independent distributor could not automatically be treated as the business or source of income of the non-resident payer merely because the entities belonged to the same group or used a common trade name. The Revenue was required to establish that the particular entity

The Assessing Officer could also have examined the customer-wise invoices, title-wise licensing statements, correspondence relating to exploitation in India, royalty reports received from the customers, revenue-sharing arrangements, Indian subscriber or viewership information, Indian distribution agreements and the basis on which the consideration was determined. If the necessary information was not available with the assessee, appropriate enquiries could have been made from the Indian affiliates, distributors or other entities connected with the exploitation of the content.

Where a licensing agreement covered India along with several other countries, it was also necessary to ascertain whether the agreement separately valued the Indian rights. In the absence of a contractual allocation, an appropriate basis such as subscriber numbers, viewership, territory-wise revenue, title-wise exploitation reports or comparable licensing arrangements could have been examined. Even where some Indian nexus was established, the entire consideration under a multi-territorial licence could not be attributed to India without a reasonable basis.

We have examined the reasoning of the Assessing Officer in the light of the relevant agreement extracts referred to in the assessment orders. The Assessing Officer did record a general conclusion that the non-resident customers to whom licences had been granted for exploitation of rights in India were distributing the licensed films and programmes on subscription to customers

In the case of Netflix Global LLC, the Assessing Officer referred to the agreement dated 01.02.2018 relating to the title “Cloverfield”. The licensed territory under that agreement comprised South Asia, which included Bangladesh, India, Maldives and Pakistan. The terms referred to in the assessment order, therefore, establish that the contractual licence extended to India and permitted exploitation of the licensed content in India. They do not, by themselves, establish that the licensed rights were used, directly or indirectly, for a business carried on by Netflix Global LLC in India or for making or earning income by that entity from an identified source in India. The agreement extract also does not indicate the consideration separately attributable to India out of the composite consideration for the multi-country territory.

The detailed clauses reproduced by the Assessing Officer concerning the distribution of content to subscribers, registration of customers, location of devices, geo-filtering and availability of content within the licensed territory pertain to the agreement with Reliance Jio Digital Services Private Limited. Reliance Jio Digital Services Private Limited was an Indian resident customer. Those clauses may establish the manner in which that resident customer

As regards the remaining non-resident customers, the assessment orders refer to certain agreements and state that licences were granted for distribution or exhibition of content in India. However, the Assessing Officer did not identify the material clauses of each agreement, the entity through which the content was directly or indirectly exploited in India, the Indian subscribers, advertisers, distributors or sub-licensees from whom income was earned, or the entity in whose accounts such income accrued. There is also no customer-wise finding, supported by corresponding material, that the particular non-resident payer earned subscription revenue, advertisement revenue, distribution revenue or sub-licensing income from India in connection with the rights obtained from the assessee.

The inclusion of India within the licensed territory undoubtedly furnishes a territorial connection and permits exploitation of the licensed content in India. However, section 9(1)(vi)(c) does not rest merely upon the geographical extent of the contractual right. The provision requires that the right, property or information should be used for the purposes of a business carried on by the non-resident payer in India or for making or earning income by that payer from a source in India. In view of Explanation 5, it is not essential that the payer should itself directly stream, broadcast, exhibit or distribute the content. The

The factual position is, therefore, distinguishable from Global Cricket Corporation. In that case, the Co-ordinate Bench recorded a specific finding that Set Satellite exploited the licensed rights in India for earning advertisement revenue and subscription or distribution revenue from India. The relevant finding reads as under:

We further notice that, in the case of agreements covering India along with several other countries, the Assessing Officer brought the entire consideration to tax without ascertaining whether the agreements separately valued the rights relating to India or whether any part of the consideration was demonstrably attributable to direct or indirect commercial exploitation in India. Even where an Indian business or source of income of the payer is established, the entire consideration under a multi-territorial licence cannot be attributed to India without a reasonable factual basis. Such attribution would require examination of the contractual allocation, territory-wise revenue, subscriber or viewership data, title-wise exploitation reports or other relevant material. No such exercise has been demonstrated in the assessment orders.

In Qualcomm Incorporated, the Co-ordinate Bench emphasised that the Revenue must establish the business carried on by the non-resident payer in India or the source of income in India for which the relevant right was used. The material conclusion reads as under:

Even if the interpretation in Global Cricket Corporation that Article 13(2) can operate independently of Article 13(7) is applied, Article 13(2) would assist the Revenue only where the royalty is first shown to accrue or arise, or to be deemed to accrue or arise, in India under the Act. Since the requirements of section 9(1)(vi)(c) have not been established, the disputed receipts cannot be treated as royalty arising in India for the purposes of Article 13(2).

The result would be the same if the controversy is examined on the basis of the treaty source rule in Article 13(7). Where the payer is a non-resident, the second limb of Article 13(7) requires

For the purpose of the present adjudication, we have proceeded on the basis that the no-permanent-establishment declarations of all the concerned non-resident customers for the respective assessment years are available on record. No contrary material has been brought on record by the Revenue to establish that any of these customers had a permanent establishment or fixed base in India. There is also no finding that the obligation to make the royalty payment was incurred in connection with an Indian permanent establishment or that the payment was borne by such establishment.

The finding of the Assessing Officer that the assessee failed to establish the absence of permanent establishments of the payers cannot substitute the positive requirements of Article 13(7). In ADIT v. E-Funds IT Solution Inc. (supra), the Hon’ble Supreme Court held:

The interpretation adopted in Decca Survey Overseas Limited directly supports the assessee under the India-UK DTAA. The Co-ordinate Bench held:

The decision of the Hon’ble jurisdictional High Court in DIT v. Set Satellite (Singapore) Pte. Ltd. also recognises the requirement of an economic connection between the royalty payment and the payer’s permanent establishment. The Hon’ble High Court recorded:

The Assessing Officer rejected the assessee’s position regarding the existence of its permanent establishment in India. On the Assessing Officer’s own factual premise, Article 13(6) could not be invoked. In any event, the existence or absence of a permanent establishment of the assessee does not establish the existence of permanent establishments of its several non-resident customers under Article 13(7).

The Revenue’s reference to the treatment adopted in assessment year 2017-18 also does not determine the present controversy. The assessment order for that year concerned receipts from resident customers. The source rule applicable to royalty paid by a resident is materially different from the rule applicable to royalty paid by a non-resident. Further, the principle of consistency cannot confer a taxing right where the statutory or treaty conditions are not otherwise satisfied.

Upon a cumulative consideration of the statutory provision, the relevant terms of the agreements to the extent referred to in the assessment orders, the rival submissions and the judicial precedents discussed above, we find that the inclusion of India within the licensed territory establishes a contractual right to

We clarify that our conclusion is based upon the terms of the agreements and the supporting material to the extent examined and referred to by the Assessing Officer. Where an agreement merely includes India within a wider licensed territory, such territorial clause, in isolation, cannot establish the use contemplated by section 9(1)(vi)(c). Had the agreements or other contemporaneous material demonstrated that the rights were used, directly or indirectly, for earning subscription, advertisement, distribution or sub-licensing income accruing to the respective non-resident payer from India, the statutory consequences would have required examination on that factual 67

Subject to the limited verification concerning the no- permanent-establishment declarations directed hereafter, we accordingly hold that the licensing receipts received by the assessee from its non-resident customers cannot be brought to tax in India under section 9(1)(vi)(c) or Article 13(2) of the India-UK DTAA.

For assessment year 2019-20, subject to the limited verification directed hereafter, the Assessing Officer is directed to exclude the licensing receipts of Rs.88,09,89,747/- received from non-resident customers from taxation as royalty. The income already offered by the assessee in its return on the basis of attribution to its alleged permanent establishment shall continue to form part of the returned income, since the controversy argued before us is confined to the additional taxation of receipts from non-resident customers as royalty. The Assessing Officer shall ensure that no part of the same receipts is subjected to tax twice. Ground Nos. 2 and 3 for assessment year 2019-20 are accordingly allowed in the aforesaid terms. Ground No. 1 is general and consequential.

For assessment year 2020-21, subject to the limited verification directed hereafter, the addition of Rs.45,01,67,071/- representing licensing receipts from non-resident customers is directed to be deleted. Ground No. 3 is accordingly allowed in the aforesaid terms. Ground No. 2 is general and consequential.

If, despite such opportunity, the requisite declaration is not furnished in respect of any customer, the enquiry relating to that customer shall remain confined to determining whether the concerned non-resident payer had a permanent establishment or fixed base in India during the relevant period and, if so, whether the obligation to make the royalty payment was incurred in connection with and the payment was borne by such permanent establishment or fixed base. The mere non-availability of a declaration shall not, by itself, establish the existence of a permanent establishment or satisfaction of the other cumulative conditions of Article 13(7). The Assessing Officer shall record a finding on the basis of the material available on record after affording the assessee a reasonable opportunity of hearing.

The aforesaid verification shall not extend to receipts from resident customers, the characterisation of the receipts as royalty, the applicability of section 9(1)(vi)(c), the interpretation of Articles 13(2), 13(6) and 13(7), or any other legal issue decided in this order. The relief granted in respect of every customer whose

During the course of hearing, the learned AR submitted that the assessee did not wish to press the additional ground raised for assessment year 2019-20 and Ground No. 1 raised for assessment year 2020-21, challenging the validity of the respective final assessment orders on the ground of limitation. Accordingly, these grounds are dismissed as not pressed. The legal issue raised therein is, however, kept open and no opinion is expressed on its merits.

The ground concerning non-grant of TDS credit for assessment year 2019-20 is restored to the Assessing Officer for verification of the relevant certificates and the information appearing in Form No. 26AS. Upon verification, the Assessing Officer shall grant the credit admissible under section 199 in accordance with law.

Ground Nos. 5 and 6 for assessment year 2019-20, concerning interest under sections 234B and 234C, are consequential. The Assessing Officer shall recompute the interest, if any, while giving effect to this order.

Ground No. 7 for assessment year 2019-20, challenging the initiation of penalty proceedings under section 270A, is premature and is accordingly dismissed.

For assessment year 2020-21, Ground No. 4 concerns the adjustment of Rs.9,36,701/- as refund already issued, whereas the assessee contends that no such refund was received. This issue is restored to the Assessing Officer for verification. If no 72